SEC v. Max Infinity Management LLC d/b/a Max Infinity Fund; Max Infinity Venture Partners, Inc.; Elder Fund Management LLC; JJRP United Corp; Grand Level Consulting Inc.; John S. Cangialosi, Jr., et al., No. LR-26233, Eastern District of New York (Jan. 31, 2025) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26233 / January 31, 2025 Securities and Exchange Commission v. Max Infinity Management LLC, et al., No. 1:25-cv-00549 (E.D.N.Y. filed Jan. 31, 2025) SEC Charges Seven Individuals and Five Entities in the New York Metropolitan Area for Perpetrating a $70 Million Pre-IPO Fraud Scheme On January 31, 2025, the Securities and Exchange Commission charged John S. Cangialosi, Jr., Peter N. Girgis, Gene “Jerry” Sarabella, Enrico A. “Ed” Carini, Caner “John” Otar, Chester E. “Chett” Scotland, and Franz H. Lambert II for their roles in a fraudulent scheme involving the purported sale of pre-IPO stock. The SEC also charged the following companies: Max Infinity Management LLC d/b/a Max Infinity Fund, Max Infinity Venture Partners, Inc., Elder Fund Management LLC, and JJRP United Corp, which were beneficially owned and controlled jointly by Cangialosi, Girgis, and Sarabella; and Grand Level Consulting Inc., which was owned by Lambert and controlled jointly by Cangialosi, Girgis, Sarabella, and Lambert. The SEC’s complaint alleges that from at least July 2021 to April 2023, the defendants raised approximately $70 million from more than 550 investors throughout the United States by selling interests in funds that supposedly held stock in private companies that had not yet held an initial public offering (referred to as pre-IPO stock). The SEC alleges that Cangialosi, Girgis, and Sarabella operated the scheme and hired and trained a workforce of unregistered sales agents, including Defendants Carini and Otar, who employed high-pressure sales tactics and told numerous lies to investors, including that the investment would return significant profits quickly, involved no upfront fees, and had little to no risk. The complaint further alleges that despite telling investors that there were no upfront fees, defendants sold fund interests that supposedly represented shares of pre-IPO stock at prices secretly marked-up by 45% to over 100%, which was used to pay sizable and undisclosed commissions to the sales agents and enrich defendants. The complaint further alleges that Cangialosi and Girgis, who have had multiple suspensions by the Financial Industry Regulatory Authority (FINRA), including during a portion of the relevant period, exercised control over the scheme, but that their control was largely hidden from investors. The SEC’s complaint, filed in the United States District Court for the Eastern District of New York, charges the defendants with violating the antifraud, securities registration, and broker-dealer registration provisions of the federal securities laws. The complaint seeks permanent injunctive relief, return of allegedly ill-gotten gains together with prejudgment interest, and civil penalties from all defendants, and conduct-based injunctions and officer-and-director bars against certain of the individual defendants. The SEC’s investigation was conducted by Sarah L. Allgeier, Nancy C. Iheanacho, and Michael Peterson, and was supervised by Paul H. Pashkoff and Pei Y. Chung. The litigation will be led by Kenneth W. Donnelly and supervised by David A. Nasse. Investors can learn more about the risks of investing in pre-IPO offerings in this Investor Alert.

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26233 / January 31, 2025 Securities and Exchange Commission v. Max Infinity Management LLC, et al., No. 1:25-cv-00549 (E.D.N.Y. filed Jan. 31, 2025) SEC Charges Seven Individuals and Five Entities in the New York Metropolitan Area for Perpetrating a $70 Million Pre-IPO Fraud Scheme On January 31, 2025, the Securities and Exchange Commission charged John S. Cangialosi, Jr., Peter N. Girgis, Gene “Jerry” Sarabella, Enrico A. “Ed” Carini, Caner “John” Otar, Chester E. “Chett” Scotland, and Franz H. Lambert II for their roles in a fraudulent scheme involving the purported sale of pre-IPO stock. The SEC also charged the following companies: Max Infinity Management LLC d/b/a Max Infinity Fund, Max Infinity Venture Partners, Inc., Elder Fund Management LLC, and JJRP United Corp, which were beneficially owned and controlled jointly by Cangialosi, Girgis, and Sarabella; and Grand Level Consulting Inc., which was owned by Lambert and controlled jointly by Cangialosi, Girgis, Sarabella, and Lambert. The SEC’s complaint alleges that from at least July 2021 to April 2023, the defendants raised approximately $70 million from more than 550 investors throughout the United States by selling interests in funds that supposedly held stock in private companies that had not yet held an initial public offering (referred to as pre-IPO stock). The SEC alleges that Cangialosi, Girgis, and Sarabella operated the scheme and hired and trained a workforce of unregistered sales agents, including Defendants Carini and Otar, who employed high-pressure sales tactics and told numerous lies to investors, including that the investment would return significant profits quickly, involved no upfront fees, and had little to no risk. The complaint further alleges that despite telling investors that there were no upfront fees, defendants sold fund interests that supposedly represented shares of pre-IPO stock at prices secretly marked-up by 45% to over 100%, which was used to pay sizable and undisclosed commissions to the sales agents and enrich defendants. The complaint further alleges that Cangialosi and Girgis, who have had multiple suspensions by the Financial Industry Regulatory Authority (FINRA), including during a portion of the relevant period, exercised control over the scheme, but that their control was largely hidden from investors. The SEC’s complaint, filed in the United States District Court for the Eastern District of New York, charges the defendants with violating the antifraud, securities registration, and broker-dealer registration provisions of the federal securities laws. The complaint seeks permanent injunctive relief, return of allegedly ill-gotten gains together with prejudgment interest, and civil penalties from all defendants, and conduct-based injunctions and officer-and-director bars against certain of the individual defendants. The SEC’s investigation was conducted by Sarah L. Allgeier, Nancy C. Iheanacho, and Michael Peterson, and was supervised by Paul H. Pashkoff and Pei Y. Chung. The litigation will be led by Kenneth W. Donnelly and supervised by David A. Nasse. Investors can learn more about the risks of investing in pre-IPO offerings in this Investor Alert.